European Markets Turn Corner, Debenhams and Morrison Jump

Lucy Stoeva
12 Jan, 2016
New York City

European stocks rebounded as domestic companies issued better than expected quarterly updates and markets in China stabilized. In the U.K., retailers Debenhams and Wm. Morrison Supermarkets surged after posting better than expected Christmas sales. SAP

[R]4:00 PM Frankfurt – European stocks rebounded as domestic companies issued better than expected quarterly updates and markets in China stabilized. In the U.K., retailers Debenhams and Wm. Morrison Supermarkets surged after posting better than expected Christmas sales. SAP’s revenues surged 18%.[/R]

European stock markets staged a rebound on Tuesday, ending a four-day losing streak on the back of positive company news and signs of stabilization of the stock market in China.

The Shanghai Composite Index inched up 0.2%, while the yuan remained stable.

In the U.K., industrial production fell 0.7% and manufacturing output declined 0.4% in November from the previous month, the Office for National Statistics reported.

On an annual basis, industrial output was up 0.9%, while the manufacturing sector was down 1.2% in November, ONS said.

In London, FTSE 100 index gained 57.41, or 0.98%, to 5,929.24 and in Germany, the DAX index rose 160.36, or 1.63%, to 9.985.43.

In Paris, the CAC 40 index added 66.01, or 1.53%, to 4,378.75.

Metro AG climbed 4% to €27.59 after the German wholesaler reported growth of 2.1% in comparable sales in December and maintained its previous forecast.

Sales in the fiscal first quarter of 2016 fell 1.5% to €17.1 billion from last year on foreign currency rate adjustments, particularly the exchange rate of the Russian rouble.

Wm. Morrison Supermarkets Plc soared 8.7% to 165.5 pence after the U.K. retailer said comparable sales excluding fuel increased 0.2% over the Christmas period compared to estimate of 2% decline.
Debenhams Plc jumped 15.9% to 76.7 pence after Britain''s second-largest department store chain reported higher-than-expected sales for the 19 weeks ended January 9, mainly due to strong Christmas trading.

Comparable sales increased 1.9%, while online sales rose 12.1% in the period from a year ago.

Peugeot SA surged 4.8% to €14.98 after the French auto maker reported sales increased 1.2% in 2015 on strong demand in European markets that offset weakness in emerging markets.

The company sold a total of 2.9 million vehicles in 2015. European sales grew 5.6% from a year ago to 1.9 million vehicles.

Sales in Peugeot’s second-largest market, China and Southeast Asia, dropped 0.9% to 735,948 units, while sales in Eurasia tumbled 73% to 12,000 vehicles.

SAP SE gained 3.7% to €74.27 after the German software services provider announced that its annual earnings exceeded the target largely on strong growth in its cloud business.

Revenues increased 18% to €20.8 billion in 2015, while operating profit fell 2% to 4.25 billion.

Electricite de France SA tumbled 4.1% to a new low of €11.99 after Andra, the French national radioactive waste management agency, said that storage and management costs could be higher than the company estimates.

According to Andra, the costs for the Cigeo deep geological storage would be in the range between €20 billion and €30 billion, depending on assumptions about underlying costs.

""There are different views on the calculation, more or less conservative, depending on estimates for future technological progress and optimization,"" Andra stated.

Last year EDF shares lost more than 40% and the stock had been removed from the bellwether French CAC 40 index.